Shim v. Buechel, 339. So.2d 315 (Fla. 2022).

Buechel and Papas (collectively, Buechel) were plaintiffs in a Florida trial court action. Shim and Cellumed were defendants. The trial involved a licensing agreement between Shim, Buechel, and Cellumed and the proceeds from the sale of a medical device company. Buechel prevailed at trial and became judgment creditors while Shim and Cellumed became judgment debtors.

Shim subsequently sold his stock in Cellumed to a third party. The sales proceeds were deposited into a safe in Shim’s home in South Korea. The sales proceeds consisted of a negotiable instrument drawn on funds deposited in a Korean bank.

There are two interesting takeaways from this, both of which are inexplicable for asset protection purposes. First, Shim personally held the sales proceeds. Second, Shim remained in Florida.

Buechel, as a judgment creditor, then filed a motion with the trial court to compel Shim to turn the sales proceeds over to them, arguing the trial court could order Shim to do so according to its in personamjurisdiction over Shim and the broad discretion granted to courts under Section 56.29(6). The trial court disagreed, reasoning that Florida courts do not have in rem or quasi in rem jurisdiction over the foreign property. Since Shim’s property was in South Korea, the trial court denied the judgment creditors' motion for lack of jurisdiction.

It has long been established ... that a court which has obtained in personam jurisdiction over a defendant may order that defendant to act on property that is outside of the court's jurisdiction, provided that the court does not directly affect the title to the property while it remains in the foreign jurisdiction.

... [A]lthough a court may not directly act upon real or personal property which lies beyond its borders, it may indirectly act on such property by its assertion of in personam jurisdiction over the defendant.

Shim appealed the district court ruling to the supreme court, which upheld the district court ruling. First, the Supreme Court recognized that the trial may order the surrender of any property of the judgment debtor if that property is legally or practically controlled by the individual over whom the court has jurisdiction. This phrase is absolutely critical.

Specifically, the supreme court provided that

The court may order any property of the judgment debtor . . . in the hand of or under the control of any person subject to the [Court’s jurisdiction] to be levied upon…A court may “decree a conveyance of land situated in another jurisdiction, and even in a foreign country, and enforce the execution of the decree by process against the defendant… While the court has no inherent power to annul a deed or to establish a title for property outside its jurisdiction, the trial court may indirectly do so by compelling the defendant to act on such property according to its in personam jurisdiction. …The court’s decree does not operate directly upon the property nor affect the title but is made effectual through the coercion of the defendant. A defendant’s obedience is compelled by proceedings in the nature of contempt, attachment, or sequestration. Such penalties are imposed against the defendant – not the property – and serve to hold the defendant accountable and prevent the defendant from relocating assets to avoid execution of a judgment.

The takeaway from this is that first, do not maintain assets in your personal name. Second, do not, directly or indirectly, maintain control over the distribution of that asset.

The Wyoming LLC statute and the Wyoming Uniform Trust Code provide the mechanisms to put this into place and to comply with the law of any state in doing so and providing asset protection overriding the decision of the Florida supreme court in the Shim matter. These mechanisms are discussed in other articles on this website, but summarily:

Wyoming recognizes that single-member LLCs and membership interests of the LLC are not subject to attachment or the enforcement of distribution directives.

Wyoming asset protection trust statutes provide that a beneficial interest is not a property interest and is not attachable, nor may the beneficiary force a distribution.

Either of the foregoing precludes the Shim result.